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FTSE 100 Live 04 March: Aviva back in Lloyd’s market, blue-chips tick lower, Bitcoin near high

FTSE 100 Live (Evening Standard)
FTSE 100 Live (Evening Standard)

WeWork to shut more London sites

17:00 , Simon Hunt

WeWork is poised to close its Finsbury Pavement location and has removed a further four London offices from its website as the firm continues to scale back its portfolio to cut costs in the wake of a US bankruptcy filing.

The shared workspace business last week served notice on WeWork customers at the 12-floor, 75,000sqft building, warning that they would have to vacate the site by the end of March.

There are now 30 London WeWork offices advertised on the company’s website, down from the 35 advertised a month ago after a number of other locations including those in Bishopsgate and Clerkenwell were also removed. At its peak, the firm had at least 50 different sites in the capital. Some customers at closing sites have been offered the option to relocate to those which remain open.

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A WeWork spokesperson said discussions with several landlords were ongoing and it was unable to comment on specific sites.

Read more here

Innovate Finance boss: why we created a Unicorn Council

15:36 , Simon Hunt

The head of Innovate Finance, Janine Hirt writes in The Standard today on why the organisation has created a UK Unicorn Council:

The UCFT is not merely a forum; it is a powerhouse coalition of the CEOs of the UK's most successful fintech unicorns and ‘soonicorns’. Co-chaired by myself at Innovate Finance, Philip Belamant, CEO of Zilch, who played a significant leadership role in bringing this initiative together, and Charles McManus, CEO of Clearbank, Council members are the trailblazers at the forefront of a sector that is crucial to the UK's economic fabric, contributing significantly to productivity and growth. Despite a challenging investment climate in 2023, the UK's fintech sector has shown remarkable resilience, underscoring the sector's robust foundation, our outstanding community of entrepreneurs, and the global confidence in the UK as a FinTech leader.

The UCFT's mission is to provide the government with key policy recommendations that safeguard and enhance the UK's global FinTech leadership, and address the investment and growth challenges that lie ahead. With direct access to senior government officials and ministers, the Council is uniquely positioned to shape policies that foster an environment conducive to scaling and growth, thereby attracting more investment and enhancing the UK's international competitiveness.

Read more here

Janine Hirt (Janine Hirt)
Janine Hirt (Janine Hirt)

US stock market movers: Tesla down, Ford up

14:58 , Michael Hunter

There is a parting of the ways on the stock market for two of its biggest names in car making.

Tesla is in reverse, while Ford is accelerating.

Here’s a look at the main drivers of the Wall Street market.

New York stocks shy away from records

14:40 , Michael Hunter

Wall Street’s S&P 500 ticked lower in opening US trade, as momentum continued to ebb from global stock markets after a stronger run in Asia, especially Japan.

The slips followed record highs over the last session, which left investors pausing for breath today. .

The broad New York index slipped just over 8 points to 5128.88 a drop of 0.16%.

The tech-heavy Nasdaq benchmark could not buck the trend, even as shares in crypto investment platforms rose, with Bitcoin’s brisk rally taking the most famous digital currency back toward record levels.

The index slipped 0.1%, or 20 points, to 16,254.58.

Hipgnosis songs deal 'more likely' after portfolio cut

14:21 , Simon Hunt

The odds of a takeover of Hipgnosis Songs Fund were raised today after a sharp cut in the estimated value of the firm’s portfolio saw its shares tumble.

Hipgnosis, which owns a catalogue of songs by the likes of Blondie Neil Young, today said its portfolio had been revised down by advisers Shot Tower to a fair market value of $1.8-$2 billion from a previous valuation of $2.62 billion in September. That would result in a cut to its net asset value (NAV) per share to 92p down from 137p.

Shares in Hipgnosis sunk as much as 15% by Monday afternoon, with the stock sinking to a new all-time low of 53p. It is now down around 50% since its 2018 IPO, and is now trading with a more than 40% discount on the value of its portfolio.

The firm’s shareholders previously rejected a proposed sale of a $440 million music rights portfolio to a private sister fund owned by Blackstone and Hipgnosis Songs Management (HSM) on the basis that the offer price was too low.

But analysts at JPMorgan today said: “It is imperative that, even in the event of [Hipgnosis] continuing as an ongoing listed vehicle, it sells some catalogues to repay debt. Somewhat ironically, it would already have done this if shareholders had voted in favour of the asset sale to Blackstone, with this now looking like a missed opportunity.

“But, by paying NAV now, Blackstone/HSM could acquire all or part of the portfolio at a lower valuation than the aborted partial offer. Thus, overall, the only silver lining of today’s announcement is that it increases the likelihood of a bid from HSM, backed by Blackstone, that would no longer be seen as low ball.”

International oil price circles $84 a barrel after Opec extends production cuts

14:05 , Michael Hunter

Brent Crude, the global benchmark oil price, circled $84 a barrel today after the oil exporters’ cartel agreed to extend the lifetime of its current production cuts.

The 2.2 million barrels a day reduction will now run until June, a further three months, having originally been scheduled to finish at the end of this month.

Brent was trading at $83.78 in the European afternoon into the start of US trading, up 0.3% on the session.

The commodity added about 5% last week in the run up to the decision, which was widely expected.

Wall Street stocks look unlikely to light up lacklustre global trading

13:11 , Michael Hunter

New York stocks are heading to join the European trend for subdued trading when the US joins the action this afternoon.

Momentum has been ebbing from global markets stock since Japan’s Nikkei 225 rose above 40,000 points for the first time.

Tokyo has been an outlier, helped by hopes Japanese interest rates could soon start to rise, leaving the era of negative rates behind.

With Europe in neutral gear, futures trade expects Wall Street’s S&P 500 to slip by about 8 points, or 0.2%, to 5138 points.

The main points on the agenda this week in the US are Friday’s jobs report and testimony on Wednesday from Federal Reserve Chairman Jerome Powell.

Midday markets: Bitcoin buy-up powers crypto rally

12:28 , Michael Hunter

London’s stock markets are making a muted start to a potentially blockbuster week, with the UK Budget on Wednesday likely to define much of the direction.

With the FTSE 100 and FTSE 250 both easing back, the standout move came for the digital block-chain driven crypto currency Bitcoin, which is continuing to head back toward its record highs.

Apple slapped with €1.8 billion EU fine over App Store rules

12:18 , Simon Hunt

Apple has been dealt a €1.8 billion fine by the European Union over its App Store rules which “abused” the tech giant’s dominant position in the music streaming market.

The European Commission has ordered Apple to stop preventing music-streaming apps from informing users of cheaper deals away from its App Store.

It follows years of complaints by major European music streaming rivals such as Spotify, which in 2019 filed a complaint with the EU in 2019, claiming that Apple’s rules limit choice and competition.

“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” EU competition chief Margrethe Vestager said. “They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem.”

Apple has rejected the EU’s fine and has said it intends to appeal the decision.

In a statement the California-based business added regulators failed to “uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast.”

Read more here

BT dials up to top spot on FTSE 100 after broker 'buy' rating

11:47 , Michael Hunter

BT took the top spot on the FTSE 100’s leaderboard in late morning trade after analysis from City bank Berenberg.

The broker boosted its rating on the stock to “buy” and said concerns over the company were likely to give way to a clearer view of the investment case in the stock.

The analysis pointed out that BT has lagged behind the wider European telecoms sector and that the investment spending that have dogged the shares now had the potential to boost returns at the company.

Shares in the fixed-line former monopoly added 1.8p to 106p, a 1.8% rise, enough to take it to first place.

Broker upgrade for BP from Jeffries.

11:40 , Michael Hunter

BP shares rose today after upbeat analysis on the oil major from City broker Jeffries.

It told investors that the “valuation gap” between BP and other major energy firms was likely to close, in part as the company cut riskier spending plans. It also said the consensus expectations over BP’s earnings among stock pickers was “conservative”.

Jeffries also pointed to the potential for payday for BP investors:

“BP should be able to step up its buyback in [the second half of 2024] to $3bn [per quarter] from $1.75bn [per quarter] which would result in total yield growing to 14.5%.”

Giacomo Romeo, equity analyst, added: “We are upgrading BP to Buy (from Hold) and increase our price target by 10%”.

BP added 3.6p to 475p.

Bitcoin rally takes the digital currency toward its all-time high

10:37 , Michael Hunter

The rally in the world’s best-known digital currency kept it on course to return to its record high set over two years ago.

Bitcoin rose by $3,390 to $64,194 in morning trade in London, a rise of 6%.

The record high – $68,999.99 – in November 2021.

There has been speculation in the so-called crypto market about a major, mystery buyer of Bitcoin, with some suggesting a sovereign wealth fund in involved. Others have linked the billionaire and Amazon founder Jeff Bezos with building a stake in the digital money.

A buyer is reported to have built up a stock of Bitcoin worth $3.2 billion since April last year, in transactions of 100 Bitcoin at a time.

Whatever else, Bitcoin has climbed back strongly from the $15,000 low it hit when the digital currency exchange FTX collapsed in a blaze of publicity in late 2022.

Bid approach for diagnostics firm Renalytix sends shares soaring

10:05 , Michael Hunter

Shares in Renalytix, a kidney diagnostic firm, spiked higher today after it said it had received a bid approach.

The £61 million firm said it was from a large and well-capitalised publicly listed” company, without naming it or mentioning price.

The stock surged 20p to over 60p, a rise of over 50%.

Miners provide ballast as FTSE drifts toward Budget day

10:01 , Michael Hunter

Heavily weighted resource stocks are helping to offset the overall drift lower on London’s main stock market.

Investors are already looking to Wednesday’s Budget from Chancellor Jeremy Hunt for a sense of direction in the near term. It is expected to be the last finance bill before a general election, widely expected later this year.

The overall drop for the FTSE 100 and the FTSE 250 was offset by rises for miners. Mexican silver miner Fresnillo rose 11p to 475p, a gain of over 2%. Endeavour Mining was up 1.6%, or 21p, to 1345p. Antofagasta was up 15p to 1831p.

Oil major BP was up 4p to 475p.

Electric motor group fails to find buyer

09:56 , Simon English

SAIETTA, the group that aims to develop electric motors for buses, ships and scooters, said today it has appointed administrators after failing to find a buyer for the business.

It unveiled a “strategic review” in late February but told the stock market today that it “regrets to announce that it is not in a position to confirm a buyer for the business and has failed to secure additional funding of the scale and form required for ongoing business stability”.

Saietta says it has a mission to “clean the air in the world’s major cities”. Chairman Tony Gott said: “While we can confirm we've had some genuine interest, at present we do not have a proposal that provides the necessary liquidity in the time we have available, following the Company's commercial update of 13th February and the subsequent market reaction. “

The shares are down 98% in the last year to 0.62p today, which leaves it with equity of less than £1 million.

The statement added: “Whilst the company’s cash flow model shows positive cash balances to the end of March, the company’s directors are becoming increasingly aware that certain contracted cash receipts may be withheld, therefore bringing forward the date, absent any further funding, on which the company can no longer solvently trade.”

Saietta Group listed on the London Stock Exchange’s AIM in June 2021 in a move that it at more than £100m.

M&C audit whacked with new fine

09:55 , Simon English

The auditors of M&C Saatchi, the Soho ad group most closely associated with the Conservative Party, were fined £1.5 million for “serious failings” for failing to meet professional standards.

The Financial Reporting Council, the audit watchdog generally regarded as a friend of in the industry, said KPMG had failed to properly oversee the firm’s finances.

M&C, best known for its “Labour isn’t working” 1978 ad slogan that helped the Tories beat Labour PM James Callaghan, has had several years in the mire as its finances unravelled.

Today the FRC said KPMG’s 2018 audit of M&C “did not meet the required quality standards in a number of respects amounting to serious audit failings and breaches of audit standards,” according to Claudia Mortimore, deputy executive counsel at the FRC.

Adrian Wilcox, a partner at KPMG who was responsible for the 2018 audit, was also fined nearly £50,000.

This is hardly KPMG’s only recent penalty. Today’s fine is the 16th it has received since 2018. Notably, it was whacked with a £21 million penalty for audit failures of collapsed contractor Carillion.

Cath Burnet, head of audit at KPMG UK, said: “We are committed to dealing with, and learning from, our past cases and regret that aspects of our 2018 audit of M&C Saatchi plc fell short of required standards. We continue to invest significantly in audit quality, in our training, controls and technology, to drive further improvements and resilience in our audit practice.”

Even before its auditors were fined, M&C had lately warned of tough trading, despite the election year that ought to see it boom.

The shares today were steady at 176p which leaves it valued at just £216 million.

M&C admitted to audit problems in 2019, a move that led to a complete management shake-up.

The FRC said: “The sanctions imposed have taken into account the fact that it was a challenging audit and the auditors demonstrated some robustness in pushing back the signing date until they obtained further evidence from management," the FRC said.

KPMG would have been fined £2.25 million had it not admitted to the breaches, the FRC said.

Wilcox was fined £48,750 pounds and received a severe reprimand, but avoided a £75,000 fine after admitting to the breaches, the FRC said.

Addison Lee back in profit

09:22 , Simon Hunt

London cab company Addison Lee swung back to profit in 2023, its recently published accounts show, as the firm expanded its driver fleet to keep pace with demand.

The business, which was sold to private equity firm Carlyle in 2013 before being bought back by the Griffin family founders in 2020, hailed profits of £6.5 million for the year, reversing a previous loss of £2.3 million in 2022. Turnover grew 3% to £223.8 million.

The firm has been on the hunt for deals, acquiring rival Green Tomato cars in June in a £10 million deal.

CEO Liam Griffin said: “Demand for premium transport only continues to grow and we’re now poised to take the business to the next level, with a focus on further expansion.”

An Addison Lee driver (Addison Lee)
An Addison Lee driver (Addison Lee)

FTSE 100 slips in opening trade with Rightmove and Ocado under more pressure

09:15 , Michael Hunter

London’s FTSE 100 slipped back in early trade, with some of the names at the centre of attention last week under sustained pressure.

Ocado was the biggest faller in early trade, down by over 20p to 455.6p with investors continuing to check out of the online grocer and e-commerce tech platform after it reported a £340 million loss last week. The shares were down over 4%.

Rightmove, the property website that warned on Friday it expected traffic to fall as the house market continues to struggle, was the second biggest faller, with stock down 3%, or 17p, to 549p.

The top-tier FTSE 100 slipped 16 points to 7666.08, a drop of 0.2%. The mid-cap FTSE 250 was 64 points lower at 19291.46, down 0.3%.

Stocks flat as Bitcoin edges closer to record

09:05 , Simon Hunt

One hour into the day’s trading session in London, the FTSE is fairly flat while Bitcoin has continued its ascent, edging closer to reaching an all-time high.

Here’s a look at your key markets data:

PensionBee shares pop on US expansion plans

08:11 , Simon Hunt

PensionBee shares rose as much as 10% when markets opened this morning after the London-based business unveiled plans to expand to the US.

The pension provider said it had “entered into an exclusive, non-binding term sheet with a large, US-based global financial institution” by opening a wholly-owned subsidiary with operational headquarters in New York.

PensionBee said it will manage the operations of the US business, including the hiring of a local team, making available its online retirement proposition and UK-based proprietary technology to consumers in the US Defined Contribution market.

Aviva to enter Lloyd's of London insurance market with £242 million acquisition of Probitas

07:30 , Michael Hunter

Aviva, the FTSE 100 insurer, is moving into the Lloyd’s of London insurance and re-insurance marketplace for the first time, via £242 million deal.

It is buying Probitas, a Lloyd’s syndicate, in a move which Aviva says “significantly expands market opportunity for Aviva's Global Corporate & Specialty (GCS) business”.

Probitas’ “Syndicate 1492” at Lloyd’s – London’s world famous marketplace for insurance and re-insurance – reported written gross premiums of £288 million in 2023. It underwrites insurance in Europe, the Middle East & Africa, Asia, Australasia, Latin America & Canada.

Amanda Blanc, group chief executive of Aviva, said: “Aviva's presence in the Lloyd's market opens up new opportunities to accelerate growth in our capital-light General Insurance business."

AI healthcare firm Renalytix receives offer

07:22 , Simon Hunt

Renalytix, which uses AI-powered diagnostics for the management of kidney disease, today said it had “received an unsolicited approach from a large and well-capitalised publicly listed strategic diagnostics company, which is in the process of evaluating an acquisition of the entire issued, and to be issued, share capital of the company.”

Renalytix did not disclose the name of the business or the size of the offer. Its stock has fallen some 70% over the past year.

Recap: Friday's top stories

06:48 , Simon Hunt

Good morning from the Standard City desk.

We can’t be sure what the Treasury Committee’s lengthy investigation into sexism in the City is going to conclude.

But I think we can guess that it is not going to say there isn’t enough of it.

Progress has been made, it will say. The question is how much teeth it asks City regulators to bare on banks still not getting the point.

One thing the Committee should say is that sexism is tied up with ageism. Women are never quite the right age for promotion they say: either too inexperienced or, later, too caught up with the family they have since had.

City institutions themselves complain that they lose talented early-fifties women who decide they have had enough. As if the fault line here wasn’t directly with them.

If this goes wrong, all we get are a few days of sexism in the City headlines.

If Parliament and the Financial Conduct Authority take this seriously, there is a chance of genuine progressive change that will make workplaces better for everyone.

Here’s a summary of our other top stories from Friday: